How to Simplify Your Budget With Separate Accounts, Automation and Your Bank App | Reair: Ambitious Time Management Strategies for Working Moms with Kristen Edwards | 571

Hey, budget besties. We recently had this conversation on another podcast and it was too good not to share here too. Yeah, we hope you enjoy it. There is a lot of noise in the finance world. There's a lot of noise in the budget and there's a lot of shoulds. There's a lot of you have to do it this way. There's a lot of cookie cutter budgets and percentages and stuff. None of that makes sense to the average person when they go to actually do a budget and what do I do with my hands now? Nobody taught you how to budget and then whatever you do try to read is just a fixed or variable expense. I don't know. It doesn't even mean your bank can be your personal assistant. It can be doing all of this stuff for you. You can be reaching all your financial goals without you having to do anything. And so when you log on to your bank app, groceries and you see exactly how much you have for groceries and you know that if you go buy groceries, your bills are in this other account protected. They're not gonna get messed up. You don't have to give up your pumpkin spice lattes. You can be on a budget and you can have, you can enjoy your life. Both things can be true at the same time. Do you make good money but have nothing to show for it? Are you tired of living paycheck to paycheck? Do you have big dreams for your financial future? Do you wanna get debt free but you don't wanna live on beans and rice? Or you don't wanna give up those pumpkin spice lattes? If you don't already know how to budget or if you're using credit cards to get through the month. If you wanna seem like you have your finances altogether or you're not on the same page with your spouse, it's like, what's the finances? We know what you're doing probably isn't working. But guess what? You're in the right place. We're Shayna. And Vanessa, we're best friends, business partners and master financial coaches trained by Dave Ramsey. We've been in business since 2019, helping hundreds of amazing people like you create budgets, get out of debt, stop living paycheck to paycheck and know exactly what to do with their money. In this podcast, we'll share with you everything we know plus everything we're working on with our clients so that you have the best chance at reaching your financial goals. We want to help you take the guesswork out of your budget, improve your marriages and even bring your kids in on the conversation. We can help you no matter where you're at, whether you're the single mom who's never had $500 in her savings account or the millionaire who's paid off four real estate work points. And we're not gonna shy away from the tough love. We'll tell you what you need to hear and encourage you at the same time. This is the Financial Coaching for Women Podcast. There is a lot of noise in the finance world. There's a lot of noise in the budget and there's a lot of shoulds. There's a lot of you, you have to do it this way. There's a lot of cookie cutter budgets and percentages and stuff. And none of that makes sense to the average person when they go to actually do a budget and what do I do with my hands now? So we developed to not only just be a really simple budget but an automatic budget system so that everything that you set the attention with, it can happen automatically so that you can go to practice and to volleyball and do all the things that you wanna do and not have to spend all this time and energy on the actual budgeting. Yeah, and we keep talking about budget and the systems and what that means. I'd love for you really to unpack some of that, maybe some foundational strategies or tips that you're typically giving people as they choose to work with you. Sure, you can put numbers and words on paper and call it a budget, but unless there's something that you're doing with that, it's not helpful. So what we've come up with is the first thing as a budget that's literally five columns. That's all we talk about is you list your income, you list your debts, your bills, your spending and your savings. And that's it. If you're thinking about how you handle your money and what do you do with your hands throughout the month, those are the five categories of how your money is handled. And so being able to see it all on one page makes it easy, makes it simple, makes it, so it's not scary, you can look at it. And there's other budgets out there, we tried to use them, the fixed and variable and all these weird terms that nobody actually knows what that means and why they're categorized that way. You're either spending money or you're paying a bill or you're saving it. Like those are the three things that you're doing. Yeah, so that's the first step that we talk about is simplify and our budget is very simple. And it matches what you do with your hands, with your money. And when Vanessa was talking about it, nobody taught you how to budget. And then whatever you do try to read is just a fixed or variable expense. I don't know. It doesn't even mean, okay? A bill is anything with a due date, done. Okay, and when I go to the grocery store, I'm swiping money, I'm spending money, right? When I'm going to ice cream with the kids, I'm spending money. And then obviously, like Vanessa said, the other component is saving. And that's it, it's very simple. We know exactly what we're doing with our money and it really gives you a clear picture of what your money is, what is going on with your money. So that's the first step. And then the second one that we say is to separate, is to separate your accounts. So when we were talking earlier about cash and Dave and you used to have cash envelopes or maybe you had tin cans or your grandma had jars or whatever. And this money goes into this one and this money goes into that one. Okay, what we're talking about, we're going into the modern age, right? We're using digital tools to make our lives easier. Your bank can do all of this for you. So we want you to have separate accounts. And believe us, it sounds maybe a little, we hear a little pushback, it sounds a little overwhelming, but actually it's really simple. You're going to have separate spending accounts and separate savings accounts and your bills are going to be in their own account. And so when you log on to your bank app, groceries and you see exactly how much you have for groceries and you know that if you go by groceries, your bills are in this other account protected, they're not going to get messed up, all of that. And so you have different accounts and then separating is kind of like a digital version of the cash envelope. Yeah, think about this old day where you have the cash, now we're moving into the new day where you have everything is digital and you don't need another app. So we hear all the time, what app do I have to get to manage and track all this? The beauty about our system is that you don't need another app. You already have your bank app done, that's all you need. Okay, and having separate accounts reduces the... Decision. The decision anxiety or the requirement to track anything. So that's the other thing is we don't have time. We're all very busy, we're running businesses, we're moms. This idea or concept to track all of your expenses or to track everything that you're buying throughout the month, nobody wants to do that, nobody has time, but unfortunately, to a lot of people, that is what budgeting is. They think in order to budget properly, they have to track down to the penny, how much they spent on gas and groceries throughout the month. None of us care, we don't care. We just care, did you transfer the money into those separate accounts? Great, have a blast. Go spend all the money in those accounts because that's what they were meant, they were transferred over there to do was to spend and then everything over here was either to save or to pay a bill. And so that's the idea of the separation part of it. And again, like Shayna alluded to, some people will come and hold on, you just said the word simplify and then you said separate. How is opening more accounts simplifying it? It is, we have a lot of people who at the beginning don't understand and then it's the husbands who come to us and say, this is the best thing ever. Because I did not realize how much clarity and simplification it was gonna bring to our finances by just separating some money around. Yeah, because a lot of people are using one account to do everything and that means you have to go through and track and think and do math in public, like in the checkout line, no thank you. So that's why we're separating it. Cause over here, all this account, only thing that's gonna happen is my bills. And that's very easy to look. You usually have 20 bills, maybe total, right? So your income's going in there and your bills are coming out. It's very simple. And then we want you to do have those separate accounts. You have your own personal spending account. And if you have a spouse, then he has his own as well. And then you guys don't have to fight about anything. Everybody has their own money, it's wonderful. You have your groceries account, you know how much is there. And then we always talk about we want you to, and we can get into kids. We have a lot to say about kids and finances, but you'll have an account for them because you know what happens is your money gets stolen by them all the time. And we want you to know that you have money, the kids have money for what they need to do and you don't have to try to scramble and find money in every different purchasing moment because it's all been planned and separated. And the very last thing, so that was two of them, so the very last third thing that we would say is to automate. So you have this wonderful bank that you use that allows for automatic transfers that people don't realize and they allow for reoccurring automatic transfers. So the idea is to make your budget and say, okay, how much do I need for gas and groceries? How much do I need for the kids? How much money do I want to spend on myself a month? How much are we saving? So you're making these decisions and then you're setting and you're using the tools that are already readily available to you by your bank and just setting everything up automatically. For instance, my husband gets paid every Wednesday, Thursday morning, all of my transfers, everything happens and I didn't do anything. I don't have to lift a finger because I've already set the systems in place to help me be successful. And my grocery money is always there replenished, my pocket money, everything, the kids is, it's all done. Yeah, I'm always a fan of having those three words. And so for you to simplify, to separate into those separate accounts that automate a lot of that work, also means that you're not doing it every single week. So you can go in and check it as much as you want, but once you've taken that time to set things up, like you're good and you're not, think about how much time you can go back to watching TV or doom scrolling on Instagram or whatever it might be, instead of crunching numbers. And I know by default, people are scared of numbers. It's not that bad guys, but it's when you actually take that time upfront to build a system to have a plan in place, it also makes a lot of it less scary. Do we have enough money to pay the mortgage and keep the lights on and still get pizza? When you have those accounts set up, you can see it pretty easily. If you do or don't, as I was listening to you talk, I remember I think it was in my early twenties, like probably my first or second job, I literally have a line item for coffee in my budget. Like I want Starbucks and Dunk, I live in the Northeast, so both Starbucks and Dunkin, but I want it all the time. And so literally carving out, here's a portion of my money that is for me to basically throw away, yes, I know I can make coffee at home, but it was something that was important to me. And so I love that you're saying, whether it's travel sports or an actual vacation, no, they're not the same, even though it feels like it. Yes, Charles. We can remember. Those are separate things, even though the hotel cost looks the same, but at the same time, if it's the spa luxe, beautiful life, if it's spending too much money at Hobby Lobby, TJ Maxx and Home Goods to decorate your house every season, or all the seasons in between the seasons. You're pumpkin-spent, I'm slothin'. Can we just do it all? Let's go right now. All the things, right? But figuring out, all right, my bills are paid. Here's that, I'll call it play money that I get to go do whatever makes it fun or gives me that joy and spark in my happiness as well. But I love that you're saying, here's this upfront system that you can put in place. And I actually appreciate that there's not a separate envelope for the light bills separate from the gas bills separate from the water heater. And like, to other things, you're like, bills, put them over here. As long as the bills are paid, then I can go see, you know, what else that looks like. All right, budget besties, it's time for surreal talk. You don't need another budget, you need a budget system. Our simplified budget system is what you've been looking for. It's gonna allow you to be bougie on a budget. You'll be able to easily set up a system that runs automatically and shows you exactly where your money is going. And it's gonna give you permission to spend. Everybody loves that. It's straightforward, pretty and packed with walkthrough videos that break down the exact methods we use with our clients to get out of debt, set up a bills account, separate spending, build savings buckets, and end the paycheck to paycheck feel. If you're new to budgeting, this is the perfect way to jump in. And if you're already a budget nerd like us, you're about to meet your new obsession. This is the upgrade to your finances that you need right now back to today's show. And you started to talk about kids. So I actually wanna go there next. I think when kids are hearing about these budget decisions, they don't need the nitty gritty, but just a high level, like, we've had pizza three times this month, we're done. To understand that also teaches them levels of budget. So even if they're not working and they're not financially responsible, they're starting to learn how these decisions get made. And I honestly feel like that's why so many of us are struggling now. It's because we were like, there either was money or there wasn't, and I have no idea how it got there. And so for these kids to actually have a heads up that by the time they're responsible for paying for their own pizza or whatever it might be, that they actually can think about these systems earlier. So the same thing that you said about Dunkin or Coffee or whatever you called it on your line item, you're gonna have a line item for your kids. And it's gonna be underspending, okay? Cause they're always trying to spend your money and we love them so much. And it evolves as they get older. So when we start off, generally, you're gonna have one kid's line item and it's gonna be a general budget for them. Because we are gonna teach you a savings bucket exactly how to plan for all the things that are not monthly, which are the unexpected expenses that derail your budget usually. But in general for kids, we know they're gonna say, hey, my friends and I wanna go get ice cream or tonight, our kids, my kids are going to the fear force, whatever that is. They're gonna come up with these ways to spend your money. We're gonna have a line item, one line item in the budget that says, this is how much we have. And like to your point, once you're done with it, you're done with it. But it allows them the idea, like we're budgeting 50 bucks for you to do all the things you're gonna do a month. When you get to decide what you wanna do, and that way it's on them and they can start to learn how to budget and how to manage time and money and what they wanna do. But it takes some of that pressure off of you, but so that's the first one and then it evolves as they get older. But we're really big on bringing the kids in on the conversation and having that correct conversation, the correct vocabulary, the correct language of when you speak about it because it is important. But if we grew up with money baggage, we don't want our kids to grow up with money baggage. But, and we don't, so we don't wanna create another one of us, but it allows us to bring it in a healthy way to say, hey, this is what we budgeted. Maybe you get to decide, right? Allowing you to create whatever that budget is and then giving the kids the ability to decide how it's spent. And so all of that pressure is taken away from you. And as they get older, my kids now have their own separate accounts because if she's that volleyball game, he's that soccer game, they each need, they're all going out to eat afterwards, sometimes not at the same place. So she now has a debit card, he has a debit card, he works for his money, so I don't fund his, but for her, she doesn't work, she's 15. So I do fund hers, right? She gets a certain amount every month that I put in there for her to be able to use when they go to Chick-fil-A or whenever after game. But also she knows that, hey, if she wants to go to the outlets for the girlfriend and go shopping, that's also her money. So she's responsible to budget and she knows that she can't go over that, she can't, it's debit card, right? It's not gonna go over, it's gonna say declines. So it's just, it's a really good way to give them some guardrails. Yeah, and I think that's the thing, right? If I want a pair of jeans, that's three trips to Chick-fil-A, then I can start to make those decisions for myself. And I love that you're saying, even at a young age, they're getting that introduction. I love that you also said having these healthy conversations. It's not dumping your best drama on them, but giving them that heads up and awareness so that they are more prepared as they continue to grow. Yeah, I think so instead of saying, we can't afford this, we have no money, it's no, like we're broke, whatever. Sometimes we don't realize the things that we're saying in the household or we're maybe speaking to ourselves that the kids are listening because they're not done, they have ears. So just listen, this is what we've decided as a family. This is where our money is going. This is a budget this month. How do you want to make it work? It's just, you can change your language around that. And so that way they are not weighed down or have that money scarcity mindset. You said earlier, numbers aren't scary. And I think they seem like they are to people, but we've seen over and over when people actually look at their numbers, then they make better decisions. It's not, it's the not knowing in the ethereal and maybe I have money and maybe I'll just spend it anyway and see what happens and I'll figure it out later. That is when you make bad decisions. But with adults and kids, what we've seen is when they're looking at their numbers, when they feel like they know, they know what's going on, then they make better decisions. And so our adults do that. They're like way more excited that they're saving buckets for the trip that they're taking is building. They get really excited. The same for kids. And I've seen it, I've seen it both with our clients and our personal lives. We're gonna do less of the going out to eat or less of grabbing this thing at the gas station or whatever, because I want those genes or whatever. So they're gonna, it's just really good while they're under your roof, give them some training. That's the best investment you can make in them. Not buying them all of these things, not doing all of these things for them, but letting them learn to manage it and do it on their own and make the decisions. While they have safety and life in this, the guardrails and they're under your roof and if they make a mistake, you can help them, right? Because you don't want them to go out for the first time when they're in college and they have to manage everything and they have never really learned how. That's not what we want for them. So my husband, if we're talking about kids, I'm gonna talk about big kid really quick. He went to the grocery store on Wednesday and he said, do we even have, because we have worked at getting our grocery budget down to what we need weekly and it took some time. It's not gonna happen overnight. So we have it down pretty packed. And so he said, I have to go to the store after grab a couple of things, cause we need toilet paper or something. And I said, let me check the account to make sure we were getting replenished the next morning. And I was like, babe, cause let me tell you, he loves to go to the store and buy extra things. That's more fun. Yeah, for fun. I'm like, no, that wasn't on the list. So I said, babe, there's 53 bucks, 53 bucks to that grocery account and go have a blast. I said, as long as you get me the three things that I need, I'm good. Yeah, but I love that with the guardrails. That's great. It wasn't just say no, it wasn't to have a scarcity mindset. If you have $50 in your account the night before it replenishes, you're really good. You do a good job. You budgeted the right way. So it's just knowing that money is there. And if you need a little extra stuff, like there's a little bit left to be able to help you out. Yeah, and you can wait till tomorrow for milk. You can't wait till tomorrow for milk. No one's gonna die. Yeah. Yeah, no, I love that. So many great insights that you've shared. I guess, is there anything else that you wanted to highlight? I think probably the newest, it's not new, but I think credit cards, a lot of the things that you hear from any strict financial thing is like no credit cards. I would love to hear your philosophy around that. Our philosophy is you make too much money to rely on debt. So most of the credit cards, because we don't know our numbers, we're not being in charge of our money. We're just using, maybe using a credit card balance as a budget, which it's not. But we want you to get to the point where you're in charge of your money, you're your own bank. That's what being intentional with your money can do. You can start to save up. So a lot of times, for example, people wanna keep a credit card in case of a pet emergency or something. What if your pet savings bucket has more money in it than your credit limit? That's the goal. And you're gonna borrow money from yourself because you're your own bank. That's where we're not gonna shame you about credit cards, but we think that you being, like credit cards is not gonna build your wealth, right? We want you to worry more about your net worth and your credit score, and that's where we stand. Yeah, I think it's just the mindset of not knowing what's going on with your finances, so feeling like you have to use the credit card, and it's just a mind game. So really it's just, Shaina said at the beginning, we do not want you to rely on credit cards at all. That shouldn't be a thing. Listen, there is one that I have that I use when I go overseas because there's a zero international transaction fee. Okay, that's the one that I use. I still budget the exact amount that I'm gonna use for my vacation, and I know I can't go over that, but my bank charges me a transaction fee, so I don't use that my debit card there. So it's just, again, I'm not relying on it, I don't need it, I'm choosing to use it over my debit card in that one situation. But so there's a ton of scenarios, a ton of different situations that we can go over, but the main part is the relying on it. Yeah, no, I think that's a really helpful way to think about it is like the money is still there, I'm using it to avoid the fee or for maybe the rewards or something else, but I'm not using it because I don't have the money. I'm just gonna transfer and pay it off afterwards. So I do like that example. I think this is a great conversation. I think whether it is singles, married people, folks with a family, we've covered a lot of the ways to be bougie on a budget, and I definitely appreciate some of the examples that you gave in a very simple and intentional way to do it. But if people are like, all right, I need to know more about these budget besties, this has been a great conversation. I would love to know that one thing that if they find you on social media or they actually see you in person, like what is the thing you want them to remember you by? I would say it would be to open a separate spending account. Like if there is one thing that you heard from this checking, from this, enough to check, there's one thing you heard from this episode, it would be to open up that separate account for your spending and have your bills over here doing its thing and then you can spend freely. I think that is the one thing that I think that a lot of clients are, and people just don't, they haven't heard that concept yet before. And so that has really been the most freeing thing for our listeners. Yeah, a lot of people don't realize you can have more than one checking and savings account. You don't have to stick with the one that you've had since you were 16 or you're 17 when you got your first job. There are more options available to you. And what we would say is your bank can be your personal assistant. It can be doing all of this stuff for you. You can be reaching all your financial goals without you having to do anything. It's on January 1st when you go to the gym, you have to go January 2nd, then you have to go January 3rd, it's so annoying, and then you have to go January 4th. With this, you can set your financial goals. You can set the first step we talked about, a simple budget, and then you can set it up to ruin automatically and you don't have to rely on willpower or you having time to think about it or anything. And then your bank is your personal assistant and you will do it all for you. And then the other thing, if you said one, but what we'll say is two, and you can be bougie on a budget. We do that, hopefully is what differentiates us from a lot of people is we don't, you don't have to give up your pumpkin spice lattes. You can be on a budget and you can have, you can enjoy your life. Both things can be true at the same time. Yeah, I love that. Thank you so much, especially for the L-Things pumpkin spice. I'm here for it. So keeping that in my life for sure. Again, this has been such an insightful conversation. I definitely think hearing things like a second checking account is probably mind blowing to some people, including myself, like as much as I have multiple savings accounts, but I think I only have one checking account. So I'm like, go fix that outside of business. Shayna and Vanessa, it has been so great to hang out with you in recording this episode. I really hope that people create that system for themselves so that they can be bougie and still be on a budget. I appreciate that you took the fear out of that B-word because it is something that I think most of us listening are like, that's not how my mom explained it. And definitely not what grandma was doing. It's all about modernized the options around how we can still live our best life, but be very intentional with our money too. Thank you so much for having us. We really had a good time talking about the B-word. Yes, we did. If you make good money, but have nothing to show for it, this quiz will help you figure out what's really going on with your money and what your next step should be. You'll get a personalized result and a simple action step to help you feel more organized and less stressed. Go to budgetbesties.com forward slash quiz and take the free quiz today. That's budgetbesties.com forward slash quiz to find out what's really going on with you.